If You’d Invested $1,000 in Broadcom Stock 5 Years Ago, Here’s How Much You Would Have

The artificial intelligence (AI) arms race is in full swing. Big tech players like Meta Platforms and Alphabet are spending massive amounts of capital to outpace the competition. As Alphabet CEO Sundar Pichai said, “The risk of underinvesting is dramatically greater than the risk of overinvesting.”

Pichai must believe it to be a mighty big risk considering his company is on track for $50 billion in capital expenditures this year, the lion’s share of which is earmarked for AI. This is great news for the companies which make that hardware. While much of the attention has been focused on Nvidia, other players are also reaping the benefits.

Broadcom (AVGO 2.76%) certainly is. The company’s revenue is up more than 40% year over year for the last two quarters. CEO Hock Tan said the company expects $12 billion in AI-related hardware sales for the full year, up significantly from past projections. Beyond hardware, the company’s recent software acquisition has been a boon to its bottom line.

A $1,000 investment would have paid off

So how much would you have made with a $1,000 investment five years ago? You would have more than doubled your money, and your $1,000 would now be worth $2,100 — not bad. Compare that to the roughly 39% the Nasdaq Composite returned over the same time span.

AVGO total return level data by YCharts.

You might be kicking yourself for not buying shares in 2019. I missed out, too. The truth is, this will happen often in your investing career. It’s the name of the game.

What is important is focusing on the future and looking for solid companies you believe in for the medium to long term, investing in a diverse set of them, and then having patience.